TUAW fans who watched Erica Sadun's proprietary "Strength" app in action yesterday saw proof that there is a degradation in signal quality on the iPhone 4 when it is handheld. The so-called iPhone 4 "death grip," which consists of cradling the phone in your left hand to manipulate the screen with the right hand, appears to be another example of regular cell phone signal loss caused by the proximity of a human hand to the antenna of a working cell phone.
In the video above, we tested an iPhone 3GS with Erica's app, and found pretty much the same results -- the signal strength is lower when the 3GS is held in the hand, and recovers when it is not being held. The big difference between the iPhone 4 and the iPhone 3GS is that the 3GS doesn't tend to drop calls as often as the iPhone 4 does.
Erica also provided the photo shown below, which shows an iPhone 4 (left) and an iPhone 3GS (right) both running the app. They're both on the AT&T network (the 3GS has an O2-rebranded SIM purchased at Circuit City) and they're both the same distance away from the cell towers. The iPhone 3GS is running on iPhone OS 3.1.2 rather than iOS 4.0, which should not affect signal strength readings in any way. It displays a different font than the iPhone 4 as the older OS does not support custom fonts.
What the photo shows is that although both of the iPhones show 5 bars of signal strength, the actual signal strength is lower on the iPhone 4 (-95 dB vs. -85 dB on the 3GS), and the Apple Graded Signal Strength is also lower (29 vs. 45 on the 3GS). This is in line with Apple's PR statement of July 2nd that says "the formula we use to calculate how many bars of signal strength to display is totally wrong. Our formula, in many instances, mistakenly displays 2 more bars than it should for a given signal strength." The iPhone 4 should be showing fewer bars than it is, since it's apparent that the reception of the vaunted stainless steel antenna is worse than advertised.